I like the idea of having some kind of xp toggle... or preferably a way of redirecting Character XP gains into Skills XP for the weapon/armor being used at the time.

The template that I envision is basically the one that Everquest 2 added when I was playing that a few years ago - they had a secondary skill tree with a separate points system to the Character XP level, with those secndary skills either modifying/enhancing combat skills, providing character Quality of Life upgrades (food buffs are greater/last longer, that sort of thing), lifetap-style self-heals, quicker crafting, and so on. The system allowed you to either turn off or reduce the gain of Character XP, thus stopping you gaining levels, and optionally to redirect Character XP to that secondary points system, so that you gained secondary points more quickly.
The meta for the game with min-maxers became quite predictable - a pre-defined set of secondary skills that provided the greatest benefit, and redirecting 100% of Character XP to secondary skill points until hitting the level cap for them. But as this allowed you to still run quests (getting the gold and item rewards, with the xp being redirected as desired) it meant that the player could still progress the story through the quest system without having to jump through specific hoops to try and game the system.